The electronic distribution of information in digital form is becoming increasingly common. Since the invention of the printing press, mass distribution of textual information has generally occurred on paper. Due to the ease of distributing and using information in electronic form, print and paper as means for distribution of textual information are no longer the unchallenged standard, and many consumers (and distributors) prefer information to be in an electronic form. Likewise, much audio and video content is distributed in electronic digital form. However, the distribution of information in electronic form gives rise to various problems.
One problem that is well-documented is the fact that digital electronic information can be copied much more easily than its physical counterpart, which may violate the copyright of the content creator. A paper book can be copied using a photocopier, but doing so is inconvenient and expensive, and, a photocopy of a paperback book is likely to be larger, heavier, and of lower quality than the original. These problems deter copying of books and encourage those interested in receiving the information to purchase a new copy, or, at least, to purchase a “used” original. Similarly, audio and video have traditionally been distributed in a tangible analog format such as analog magnetic tape, vinyl disk, film, etc., which can be copied, but any copy is likely to be of lower quality. Commercial audio and video have, for some time, been available in digital format (e.g., Compact Disc (CD), Video LaserDisc, Digital Versatile Disk (DVD)), and the problem of copying is rapidly becoming evident.
The problem of copying digital content is exacerbated by the fact that digital content cannot easily be “re-sold.” In the physical world, a book, analog videocassette, audio vinyl disk recording, etc., can be sold from its original owner to a secondhand purchaser. This may be an advantageous transaction for both parties: the secondhand purchaser acquires a used copy of a book, record, videocassette, etc. at a reduced price as compared with the cost of a new copy, and the seller may be able to get some money for an item that he or she no longer needs or wants. This situation has no analogue in the digital world. A first user of digital content generally transfers that content to a second user by making a copy of the content (e.g., by copying it to a floppy disk, or transmitting a copy over the Internet). Once the copy is made, the first user has no incentive to destroy the old copy, since both copies are equally good and equally usable. In other words, in contrast with the physical world, transfer of content in the digital world does not normally deprive the original owner of the content. Thus, a person who wants to acquire a copy of digital content must purchase it new or make an (often illegal) copy. In theory, the legal terms of a copyright license for the content may require payment to the owner of the content at the time the copy is made, but compliance with such terms is rare at best.
Various Digital Rights Management (DRM) systems have been developed to ensure that each user purchases a new copy of a given piece of content. For example, the Microsoft® eBooks system, in one embodiment, permits content to be licensed for use only on computing devices that are registered to a particular user, and denies usage of the same content on other computing devices. This essentially encourages anyone who wants a copy of the content to purchase it at full price. However, the content may not be of sufficient value to a given person to induce him or her to buy a new copy. Such a prospective purchaser is left with three choices: either (1) pay the new-copy price, (2) do without the content, or (3) illegally pirate the content. This cost of this choice is realized in the form of an enormous amount of illicit copying, as well as new-purchase transactions that never take place because the cost is too high. It would be advantageous if digital content could be “re-sold” on some terms that result in a reduced price for the purchaser, while still allowing the publisher or other copyright owner to receive compensation for every outstanding copy of the digital content. This would allow those who would normally buy used paper books, records, videos, etc., at a reduced price to engage in analogous transactions in the digital content world.
In view of the foregoing, there is a need for a system that overcomes the drawbacks of the prior art.